- The Washington Times - Saturday, July 21, 2007

AUBURN HILLS, Mich. (AP) — Officials of Chrysler Group and the United Auto Workers — after they dispensed with formalities yesterday — staked out how to approach what many consider to be the most important talks in U.S. automotive history.

UAW President Ron Gettelfinger repeatedly wouldn’t answer specific questions about bargaining strategy, but told reporters the union has already done a lot to make the Big Three more competitive. The UAW has given health care concessions to General Motors Corp. and Ford Motor Co. and approved buyout and early retirement packages that let all three companies, including Chrysler, downsize their work forces.

He has said in the past that the union is not in a concessionary mode.

Chrysler Chief Executive Tom LaSorda, on the other hand, predicted the negotiations would be difficult and said they are an opportunity for true change in the face of unprecedented challenges.

“We can no longer afford to conduct ‘business as usual,” ” Mr. LaSorda said.

The comments came after traditional handshakes to formally kick off the talks, but negotiations have been under way for months. Similar events will take place Monday with Ford and GM. The UAW’s national contracts with the Detroit Three expire Sept. 14.

All three have said they need to reduce labor costs to become competitive with their Japanese rivals: Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co.

Industry analysts have said reducing costs is critical to the domestic companies’ survival.

Chrysler and the union are clearly focused on health care, with both calling for some sort of national solution to the problem of rising costs for active workers and the huge obligation to care for retirees.

Chrysler Senior Vice President John Franciosi, the company’s chief negotiator, said the three automakers would begin a more aggressive grass-roots lobbying campaign in Washington to address the costs, and Mr. LaSorda called health care a national crisis. Mr. Gettelfinger has often called for a national health care system.

Both say they are competing against foreign automakers whose governments pick up the tab for health care.

But without national health care, the companies and the union must still deal with the huge problem of their retirees’ medical expenses.

The U.S. automakers collectively have a $90.5 billion unfunded liability for retiree health care, and all are interested in reducing or eliminating it. One solution they have floated came from a contract settlement last year between the Goodyear Tire & Rubber Co. and the United Steelworkers.

The company agreed to pay the union $1 billion to set up a trust and take over $1.2 billion in hourly retiree health care liabilities.

The UAW reached a similar agreement with troubled auto supplier Dana Corp. earlier this month, but Mr. Gettelfinger said that doesn’t mean the union will go for something similar with the automakers.

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